Alibaba offers $3.5 billion for Youku Tudou, “China’s YouTube”

Alibaba Group Holding Ltd offered to pay $3.5 billion to become the sole owner of Youku Tudou Inc, known as China’s YouTube, in a move that would give the e-commerce giant access to more than half a billion online video users.

The offer, a vote of confidence in China’s economy from Alibaba Chairman Jack Ma, makes Youku Tudou the latest in a string of U.S.-listed Chinese companies being taken private by big shareholders.

“Alibaba needs traffic. Online or mobile video is the number one place for that,” said Tian Hou, an analyst at TH Capital in New York.

Alibaba first bought into Youku Tudou in mid-2014, acquiring a stake of about 18 percent as part of a push into online video.

Alibaba’s offer for Youku Tudou values the 82 percent of the company it does not own at $4.6 billion.